Agriculture Committee on Dec. 8th, 2011

[Mike Dungate]

I just wanted to add to that.

Just so everybody understands, when we say 7.5% for us, that is based on what we produced in 2010. It increases every single year as we go along. When other countries talk about the access they provide, at the WTO it's based on the consumption from 1986 to 1988. It's static. So don't just compare somebody's 5% to our 7.5%. Our 7.5% is twice our WTO commitment. We've got lots of tools. The government understands this very clearly. We talk to Minister Ritz and Mr. Lemieux on a regular basis to understand what those issues are.

The second part is—and you didn't hear it in our presentation—that we talked about the chicken imports working group that Minister Ritz put in place, and that's to deal with issues of circumvention around that TRQ. We're pleased that we're going to have the implementation of those recommendations.

[Frank Valeriote, Liberal, Guelph, ON]

Mr. Evans, very quickly, I understand, from conversations, that the CFIA lacks certified veterinarians. A number of them are engaged in excessive travel time, etc.

Can you tell me your understanding of the lack or abundance of certified vets with CFIA?

[Russell Evans]

No, not really. I don't really have a handle on how many they have. I know when we ship cattle across the border, we have to find certified vets to inspect those loads, and then we have to go to—

[Frank Valeriote, Liberal, Guelph, ON]

Do you have trouble finding certified vets?

[Russell Evans]

No, no, we have no trouble with that, but we have to go to a provincial vet to have a signature to export those cattle across the border. That is one of our limitations, or a cost—an additional cost—and something that we certainly look forward to being rectified with the e-certification that was just announced in the perimeter agreement, the action plan, yesterday.

[The Vice-Chair, NDP, Malcolm Allen]

Thank you, Mr. Valeriote.

Mr. Lemieux.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you, Chair.

I just wanted to go back to my original question. We ran out of time there.

Doug, could you perhaps comment on, as I said, what's of greater benefit to your industry? Which programs are of greater benefit to your industry?

[Doug Chorney]

Sure. Thank you for the question.

Certainly AgriInsurance is the number one product for us in Manitoba. We have a really well-designed and efficient system, where we have 86% of crop producers engaged in subscribing to a crop insurance contract every year. I think we've heard from our commodity groups about the desire for other livestock insurance, for cattle and hogs, and I think there are some pilot projects and research being done in Manitoba.

We've also heard discussions about price insurance and how Alberta has a system. Maybe it's not working perfectly, but I think it is a model that farmers are looking at. What's really unique about those programs is that farmers have a significant amount of skin in the game—40% of the premium is paid for by farmers.

We have government support, but government can predict and budget for these exposures, and that's valuable, and it probably takes pressure off the other more unpredictable programs.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Could you explain the key elements of the crop insurance program?

[Doug Chorney]

Essentially, it's based on an historical production for different areas of the province in Manitoba. We take individual producer indexes, based on a 10-year average, to recognize management skills of producers. And that will affect your ability to purchase coverage and the cost to you and the coverage you'll be able to receive. It fluctuates, of course, with market prices.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

The coverage is based on the market price or the futures of a commodity, as you see it on the stock market.

[Doug Chorney]

It's actually a fixed price each year that's set annually. Government, with cooperation federally and provincially, put together those prices early in the year. In March producers are given estimates for their farm—

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Then you insure a percentage of that price, and that has an impact on your premiums.

[Doug Chorney]

Right.

You can choose to have 80% coverage, 70%, or 50%, and they also have a whole farm product now, where you look at all the commodities combined, and you can get over 90% total coverage.

This is a highly desirable tool for farmers, and I think it's very popular.

If AgriStability is to evolve...and I did mention in my presentation that we would be open to look at an insurance-modelled approach.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

That's kind of what I'm asking, actually.

There is tweaking that can be done to AgriStability; there are things that can be changed to perhaps address some of the concerns. Or is it better, actually, to take the money that would be involved in AgriStability and allocate it elsewhere, into a program that's actually more beneficial or more responsive to your sector?

[Doug Chorney]

Well, the AgriInsurance systems are really designed for production. They don't reflect the market problems you can have that AgriStability is meant to address. I think there's still a place where we need to help producers out when there is a market problem that affects prices. I wouldn't say pull it completely away from AgriStability—

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Right, so you would find a different balance.

[Doug Chorney]

A different approach might be palatable.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

I'll go over to Russell and Terri.

[Russell Evans]

I'll just touch on it here and let Terri finish off.

I guess one of the provisos that our members always have is that it's not countervailable. We're very sensitive to those.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

We're sensitive to that, too.

[Voices]

Oh, oh!

[Russell Evans]

Our guys are saying, “Well, let's look at a margin insurance program so that we lock in a range of margins that we target, and if it falls below that, there's coverage there.”

They're willing to put the producer money in, and maybe it's government administered or something like that as well.

[Terri Holowath]

AgriInvest, as I said earlier, is probably not working as well as you would want it to work, just because of the limitations. It's capped at $22,500.

On AgriStability, I don't think the house needs to be torn down, but it needs to be renovated. If you turned it into something that looked more like a margin or production insurance program that was linked to inventory sales, I think it would be more effective.

The pie doesn't need to be bigger; it just needs to be managed differently.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

We're agreeing on that point, but the question is how should it be managed. And the cost of production models at the federal level definitely enter into the possible countervailability realm, so we have to be very careful with that, which is why I keep talking about insurance, because the risk of countervailability is just not the same. I received many briefings on that. I had discussions with different commodity groups on it and it offers certain advantages.

I just wanted to get your feel on that.

Okay, that's good. Thank you, Chair.